WASHINGTON (CNN) --Democrats support President Bush's handling of the Iraq situation but believe he must do more to strengthen America's economy and its homeland security, said a Democratic governor delivering the opposition party's response to the Republican president's State of the Union message.

Bush has dealt properly with Iraq and its "ruthless tyrant," Saddam Hussein, said Washington Gov. Gary Locke, who spoke Tuesday night after the president's annual speech, the second in his administration.

"We support the president in the course he has followed so far – working with Congress, working with the United Nations, insisting on strong and unfettered inspections," said Locke, head of the Democratic Governors' Association.

Yet troubles with Iraq should not overshadow the war against al Qaeda and other agents of terror, Locke added in his 11-minute rebuttal to the president.

"As we rise to many challenges around the globe, let us never lose sight of who attacked our people at home," he said.

Locke also criticized the president's proposed 10 year, $670 billion economic stimulus plan, calling it "upside-down economics" that would create a $1 trillion deficit over the next decade.

The president's plan to eliminate taxes on stock dividends would be more beneficial to the top 1 percent of taxpayers -- people making more than $300,000 a year -- than the bottom 95 percent combined, Locke said.

"We believe that every American should get a tax cut. That's the way to create broad-based growth," Locke said. "But we shouldn't spend hundreds of billions of dollars on a plan that helps neither the economy nor the families that need it most."

He said that 2 million people have lost their jobs since Bush took office two years ago, while 22 million jobs were created during the previous eight years of the Democratic Clinton administration.

Locke said the Democrats' proposed economic plan would provide $100 billion in tax relief and investment, including: tax relief for middle-class and working families; incentives for businesses to invest and create jobs; help for cities and states; and extended unemployment benefits for millions of Americans.

Calling domestic security "one of our most urgent priorities," Locke also urged the president to release $2.5 billion Congress authorized last year to pay for equipment for police and firefighters, to beef up security at nuclear plants and to guard against bioterrorism.

Democrats also would demand full funding for education, call for a Medicare prescription drug benefit for all seniors and "resist this administration's ongoing campaign to roll back environmental protections," Locke said.